The Defense Production Act and the Failure to Prepare for Catastrophic Incidents

Editor’s Note: This is the second article in a two-part series on the Defense Production Act. The first article, on the history of the Defense Production Act, can be found here.

When early data from Mexico suggested that a new strain of influenza, H1N1, might have a mortality rate between 1 and 10 percent in April 2009, the U.S. government sprang into action. Washington anticipated that the H1N1 virus might lead to a public health catastrophe as bad or worse than what is happening today with COVID-19. At the time, I was a junior analyst in the secretary’s office at the Department of Transportation, and I was tasked to work with interagency colleagues to assess ways the Defense Production Act (the Act’s) authorities could be used to respond to the crisis — much like countless unnamed public servants have probably done since early in this pandemic. Luckily, as we all know now, H1N1 did not lead to consequences such as we see today, though it still became a pandemic and tragically killed an estimated 12,469 Americans within a year. After the chaos of the initial response to H1N1 subsided, I distinctly remember optimistically thinking that H1N1 would be the warning sign the nation needed to better prepare for the next catastrophe.

Unfortunately, having worked in subsequent years on policies to prepare for, respond to, and recover from catastrophic disasters in both the executive and legislative branches, and now for non-profits, I can attest that the country’s current dismal situation is utterly unsurprising. The executive branch’s ad-hoc application of the Defense Production Act’s authorities to this pandemic is Exhibit A of how our government, across multiple Republican and Democratic administrations and throughout the national security enterprise, has failed to develop or adapt the Act’s tools for the threats of the 21st century. This failure has occurred despite congressional attempts to improve realistic planning for using it in catastrophes.

The United States should use some of the Defense Production Act’s tools that exist, before the next catastrophic disaster comes around. These tools include the forgotten Title VII authority of voluntary agreements. This allows the government to develop action plans directly with industry to respond to anticipated needs from the private sector during a crisis. Federal agencies should also create National Defense Executive Reserve units, which are volunteer groups of private industry experts that can work directly alongside government in times of crisis to supplement or address shortcomings in government expertise. Frankly, our lack of preparedness for this crisis would make our Cold War-era counterparts retreat to their bunkers.

What is the Defense Production Act?

The Defense Production Act gives the government extraordinary authorities in a crisis. As a simple summary, in the interest of national defense (broadly defined), Title I authorities allow the government to procure, without competition, goods and services that already are or can be produced by private industry (e.g., to obtain and distribute personal protective equipment). Title III authorities allow the government to help private industry produce goods that it does not produce enough of already. Using this authority could, for example, encourage the manufacturing of more medical ventilators by companies that might be able to do so with sufficient financial support or right industrial equipment. Title VII authorities provide a range of options for the government and private industry to evaluate, plan for, and potentially even work together to better provide for the national defense (e.g., to work collectively on vaccine production). For more thorough explanations of the Act, and how it might apply to our current crisis, I recommend several reports from the Congressional Research Service.

Unfortunately, the results from those planning and real-world efforts, and others that preceded and succeeded it, have done little to prepare policymakers for actually using the authorities in a coherent fashion in a global catastrophe, as evidenced by the confused discourse about what the Act can and cannot do that is playing out daily over Twitter and in the news media.

Why was America Unprepared to Use the Defense Production Act in this Pandemic?

So why did the national security enterprise seem so unprepared to use the Defense Production Act in response to the current pandemic? First, it is not the fault of Congress. To its credit, Congress has tried to poke and prod the executive branch to plan for the potential need for the Act’s authorities, especially Title I authorities, in a catastrophe. Following my experiences in the H1N1 pandemic, I helped develop the Department of Transportation’s rules on the use of the Title I priorities and allocations authority of the Act. The department was responding to a congressional mandate for all six agencies that are delegated the President’s Title I authority based on their designated industry of expertise (e.g., the Department of Energy has responsibility for Title I authorities for the energy resources) in the 2009 reauthorization of the Act. Congress mandated that each agency develop a rule to “establish standards and procedures by which the priorities and allocations authority under this section is used to promote the national defense, under both emergency and nonemergency conditions.”

Congress ordered this to be done by July 2010. The Department of Transportation’s rule was finalized, over two years late, in October 2012. The Department of Health and Human Services only completed its rule, applying to all health resources, in 2015, and the Department of Defense has yet to complete its rule for water resources as required by the law. If the lack of haste is not emblematic enough of the low priority given to the task by federal agencies, the lack of new ideas among the five rules that were finalized is telling. In the end, the agencies’ rules are little more than cut-and-pasted from an antiquated, pre-existing rule the Department of Commerce first developed in 1984.

But did anyone in industry notice or care? Despite the legions of government affairs staff, lawyers, and lobbyists that the transportation and healthcare industries employ, when the Departments of Transportation and Health and Human Services issued their Title I rules for public comment in 2012 and 2015, respectively, no one responded with comments on procedures that could massively alter the nature of their industry in a time of crisis. I suspect that such a rule might now generate considerably more interest from the private sector.

Understandably frustrated by the lack of progress to issue rules or adequately prepare to use Title I authorities, Congress, through the committees of jurisdiction for the Defense Production Act, (specifically, the House Financial Services and the Senate Banking Committee), tried again to address the issue in the 2014 reauthorization of the Act. This time, Congress revised an interagency body called the Defense Production Act Committee to focus exclusively on coordinating and planning for the effective use of Title I authorities, including the contingency planning of agencies. As part of the revision, Congress specifically required the federal government to go through an intentionally painful bureaucratic process of gathering signed “attestations” from senior executives across the federal government stipulating that they agreed with an annual report required to be produced by the Defense Production Act Committee. In essence, this was done with the hope those same officials and their cohorts might read the document they were signing, developing at least a passing familiarity with how the Title I authorities might be used by their agencies before a crisis. Obviously, the strategy failed, as the Department of Health and Human Service, whose Title I rule was completed in 2015, erroneously wrote in the 2019 report to Congress that the rule was still in draft form.

By the time I left the Department of Transportation in 2011, I was already afraid of how ill-prepared the nation was to use Title I authorities when they would be needed for a catastrophe. I subsequently worked for many years with the Congressional Research Service, often supporting the Congress during numerous Defense Product Act-related controversies (real and imagined) and on various related legislative efforts. My vantage point serving Congress revealed to me how the U.S. government was even less prepared to use the other important authorities of the Act in a time of real crisis.

There are abundant examples from the Department of Defense on how Title III authorities can be used effectively in peacetime to develop sources of critical items ranging from “advanced carbon nanotubes” to “traveling wave tube amplifiers for space.” However, I spent many fruitless hours supporting Congressional oversight by trying to obtain any plan, of any quality, by the Defense Department or other federal agencies on how they might use Title III during a crisis. Certainly, I thought, there would come a dark day when the nation would need to scramble to increase industry production to address a shortfall of a critical good — like medical ventilators. However, to the best of my knowledge, no such plans exist.

Congress also anticipated the need to use the voluntary agreements from Title VII of the Act to help respond to national emergencies that affect critical infrastructure systems like the nation’s healthcare system. This authority allows private companies to work in concert with each other and the government toward executing a specified plan of action or agreement in ways that normally would often run afoul of antitrust laws. Responding to recommendations from the National Infrastructure Advisory Council, Congress revised the authority in 2009 to make it easier to use during national emergencies such as the current crisis. However, despite changes to the law, and innumerable changes to both the world and the national security threat landscape, the Federal Emergency Management Agency’s regulation on the use of voluntary agreements has not been substantively updated since it was written in 1981. To this day, the voluntary agreement authority is only used for two arcane Department of Transportation programs to support the potential sealift capabilities of the Defense Department.

There are other potentially useful authorities in Title VII of the Act that are even more neglected by federal agencies. For example, imagine the potential benefit of having a trained, volunteer cadre of healthcare experts from private industry working directly for the government, right now, to help manage this crisis. Instead of operating ad-hoc in a “shadow” task force, private sector experts on testing, vaccine development, and medical manufacturing could have been working side-by-side with the government in a preplanned organization since the first signs of a pandemic. Such a system would be possible if the Department of Health and Human Services maintained a National Defense Executive Reserve as authorized by the Act, but no federal agency operates such a reserve.

Systemic Problems Beyond the Defense Production Act

The lack of preparedness to use the Defense Production Act’s authorities in a catastrophe is symptomatic of a larger, more dangerous problem. A similar story could be told about other programs and authorities that support plans to respond to domestic and global catastrophes. Many have tried to understand the wide range of reasons for this failure to prepare, ranging from the psychological to the bureaucratic. And this is certainly not the first time the lack of preparedness for catastrophes has been revealed, including in this decade (e.g., consider the federal response to the 2017 hurricane season).

Likewise, the nation’s once robust federal continuity programs (including continuity of operations planning and associated continuity of government planning), have atrophied. Where once there existed extreme, perhaps even absurd, government efforts to survive a nuclear apocalypse, museums stand in reflection of a bygone era. As a vast number of Americans can now report, communication technologies have revolutionized the ways that one can continue to perform work functions away from the office (as one might in a continuity program), and yet the federal government seemed ill-prepared to allow federal employees to telework even during this relatively slowly evolving public health crisis. Current federal continuity programs and plans remain heavily classified and thus escape public scrutiny, likely to the detriment of those programs. However, it seems reasonable to assume that if agencies could not readily execute telework plans during this crisis, the nation is likely unprepared to execute continuity of government operations for other catastrophes.

Looking Ahead

The current pandemic, resulting from a naturally-occurring virus, is just one of many potential catastrophes that might have revealed the nation’s lack of preparedness to use the Defense Production Act authorities or other Cold-War era programs. Numerous other catastrophic risks in the rough order of magnitude of this pandemic exist, both natural (e.g., an earthquake along the Cascadia fault line) and man-made (e.g., the terrorist use of a weapon of mass destruction). Humanity will also develop technologies this century, including in fields of artificial intelligence and synthetic biology, that will exceed the potential benefits and perils of nuclear technology in the last century.

Within the scope of national security, there are even graver risks than the COVID-19 pandemic that the United States is even more ill-prepared to mitigate or respond to such as global catastrophic risks (i.e., those that could cause hundreds of millions of deaths) and even existential risks (i.e., those that threaten the destruction of humanity’s long-term potential, or human extinction). Therefore, the U.S. government should redouble efforts to achieve the National Preparedness Goal as it relates to all hazards, despite what will be an understandably strong urge coming out of this crisis to exclusively focus on the set of biological catastrophic risks.

To do so, the United States can learn from the current predicament to reimagine how to use programs and authorities from the Cold War era to mitigate this range of modern, catastrophic risks. To improve the country’s preparedness for using the Defense Production Act’s authorities, America must start by appreciating their obvious value to mitigating domestic, and foreign, national security risks. Despite what some recommended before this crisis, this is not the time to reduce the scope of the potential threats the Act’s authorities could be used to address. Federal agencies should take seriously their legal obligation to establish and annually review standards and procedures for using Title I authorities in emergencies, and to participate actively in the Defense Production Act Committee.

Agencies should also openly engage with private industry to plan for using Title I and III authorities during a crisis. An easy starting point for that would be to identify and establish those possible voluntary agreements that are needed to mitigate many national security risks. Those agreements would provide a testing ground to evaluate how Title I and III authorities affect change in a real crisis for specific, anticipated purposes like the production of critical medical resources or the coordinated restoration of the electrical grid. Agencies should also establish voluntary National Defense Executive Reserve units so unique private sector experts can work for the government in future catastrophes. For civil defense, the nation can redevelop community resilience by training a new generation of volunteers to supplement government capacity in times of crisis. This could involve, for example, investing heavily in an expansion of Community Emergency Response Teams.

For continuity programs, the nation needs to reconceptualize how “continuity” can be maintained beyond having people in bunkers underneath mountains, through resilient uses of modern communications technology. Our nation should also think beyond what it means to “continue” as a country, and consider investing in projects, such as the Svalbard Global Seed Vault (a resilient storage facility intended to secure a genetically diverse collection of crop seeds for centuries to come), to help address what it might take for humanity to continue following a global catastrophe.

As the last two months have made painfully clear, the United States was poorly prepared for this crisis. Despite attempts by Congress to stimulate better executive branch planning, the nation was not prepared to use tools of the Defense Production Act to respond in a timely fashion. Unfortunately, this failure is indicative of wider problems in our nation’s preparedness for many other extreme catastrophes on the horizon. It does not need to be this way. Like I did after the H1N1 pandemic, I find myself hoping that our nation will learn from this current catastrophe and, moving forward, better prepare ourselves for the risks to come.

Jared Brown works in government affairs with the Future of Life Institute and the Global Catastrophic Risk Institute on the policies related to reducing global catastrophic and existential risk. The views and opinions expressed in this article are his own. He previously worked for the Congressional Research Service and the Department of Transportation on homeland security and emergency management policy and is the original co-author of the Congressional Research Service’s primary report on the Defense Production Act.